Grains have fallen through the January lows to confirm the February break is in process.
By midweek, soybeans had done a reversal and closed the week higher. Because at this time I do not look for new lows in the grains market from the December lows, the market technically is in an up trend. And if new lows are not in the cards (for me, anyway), it appears that we need to pace ourselves.
Highs, lows
The trade got a bit aggressive in the selling of grains, and now the market is cleaning them up. The weather in Argentina remains key as rain got pulled out for the weekend into the week beginning Feb. 9 along with some talk of hotter temperatures.
It's the temperatures that catch the trader's eye. It is not uncommon to try to put in the low by Feb. 13 during history and, this year, the percent of usage for soybeans in relation to supplies is only slightly higher than last year and for all purposes, pretty much in line with last year. In similar years in the past, the decline is muted or soft.
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Requests overseas
Four of the leading farm groups in Argentina will meet soon to decide about striking since no news or response to the farm groups request for export taxes to be lowered to zero for the next three months and then perhaps to 10 percent thereafter for three months. The Argentine government has been quiet about these requests.
Early planted soybeans that are being harvested are said to be down 20 percent in yields. The later planted should be better.
Because of continued Chinese interest in both U.S. and Brazilian soybeans and expectation of continued good exports to China, I look for the U.S. Department of Agriculture to lower the carry for U.S. soybeans and world stocks as well.
While this market still can chop around, I tend to be positive at this time.
